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How To Avoid Cash Flow Problems
The wheels of finance don’t always turn smoothly. As a freelancer or contractor, cash flow is your main concern, and anything impeding it is likely to give you a headache. Yet the means of manning a steady ship, so to speak, are quite simple when you get down to it.
This isn’t to claim that managing your cash flow is entirely pain-free. But it can at least be broken down in terms we can pin to the wall for future reference. Here are Bright Ideas’ firm tips for avoiding any hiccups with your finances…
Time your payments well
Timing is everything where cash flow is concerned. While your revenue may far exceed expenditure over the entire year, you don’t want to be left in the lurch if your clients are being elusive with payment. Remember to schedule forking out for equipment, bills, rental charges and other expenses when you can definitely afford them each month.
To ensure you don’t fall behind in this regard, be voracious with issuing and chasing invoices. By including late payment penalties in the small print, and making each client aware of them, you’re in with a greater chance of managing your payment window.
Save for emergencies
Something unforeseen may happen – a sudden dip in demand for your services, a personal crisis, an investment that’s derailed at the last minute… however fate might choose to express itself, cash flow needs a backup to resist causing you financial nightmares.
You should have enough savings to tide you over for a couple of weeks – ideally months – to keep yourself afloat and those necessary outgoings ticking over. If you are marred by an unfortunate situation, then it’s far easier to dust yourself off and get back to making money.
Bookkeeping software
Wouldn’t it be brilliant to get some perspective on what’s going in and out of your account? Well, it’s swiftly achievable with a bookkeeping platform like FreeAgent. In addition to securing vital information and evidence in one place, it displays your expenditure, due payments and financial forecasts in real-time.
So rather than being swamped in receipts, invoices, and tax liabilities, you can gain a holistic view of where you’re at, and what’s on the horizon. Give it a whirl after seeing what attributes it has to offer.
Hire an accountancy service
In many cases, a healthy cash flow comes down to understanding its various creases and wrinkles and finding the time to do so. Since you’re naturally embroiled in harnessing your talent for other things, perhaps an accountancy service is just what you need for such a gap to be filled.
Bright Ideas is the ideal right hand of any contractor or freelancer stumped by cash flow troubles. With our expertise to draw on, you’ll have a real grasp of your earning and spending patterns, and how they could be improved.
Our three-tiered accounts packages all come with FreeAgent as standard, adapting to the escalating needs of your earning potential. Contact us on 0161 669 4221 or email Info@biaccountancy.com to steer clear of cash flow issues for good.